Well, let’s see: The ‘news’ media is helping the Obamafolk hide Russian’s invasion of Ukraine and Chin’s invasion of the Spratly Islands behind ISIS on the Iraqi/Syria border. The media and likely the White House are using the Chinese water torture on Hillary, drip, dripping bits of her various scandals lest they are forgotten as ex-Governor O’Malley is heated up for presentation in her stead.
The Prez and the Congress are selling a non-existent ‘recovery’ while hoping that the coming financial collapse will hit on the other party’s watch. (Neither wishes to channel Herbert Hoover.)
In short, the U.S. and the E.U. both have too many people too dependent upon government benefits that cost more money than those governments have available. The lenders who have made this possible are now worrying about repayment; the bond giant Pimco just worried whether the E.U. can continue.
If the governments can’t repay their debts, the banks, retirement plans and investors holding those bonds (A bond is just an I.O.U.) will lose their lent wealth. Banks will go bust for inadequate capital. Stock and real estate will not sell since few will have much money; their values will fall. And a lot of politicians will not be reelected. That last part is considered serious by politicians.
Places like China and India will not thrive as the U.S. and E.U decline, these ‘developing’ economies need customers. A falling tide grounds all boats, to paraphrase a cliche’.
Finance writers are wondering if the U.S. dollar might be the trigger for this cycle. It is becoming worth more as the Euro and Yen lose value. The dollar really isn’t worth more, but enough folks prefer it so it is enjoying a rising exchange rate. That makes repaying borrowed dollars more expensive.
Two things produce this: The Euro and Yen folk are printing more money, diluting their value by comparison with the dollar. And the Fed has all but shrieked on a bullhorn that it intends to raise interest rates, making the dollar more expensive to borrow. What any currency will be worth the day after the next collapse though, likely amounts to about a tinker’s damn as grandpa used to say.
For the moment, we can have some faith in the Swiss Franc, as the Bank of Switzerland had to give up the financial Russian Roulette played by the big boys. But comes the day too few customers can buy Swiss exports, that too will become a trap.
But a decent wine can be had for less than $5 a bottle, carne asada is, if not as good as a New York steak, still worthy and for the moment, gasoline is what passes today for affordable. Eat, drink and be merry, for today is the Christian commemoration of Christ’s triumphal entry into Jerusalem.
Of course, that didn’t last. Little in this universe seems to last; including financial collapses.